Salt can help take sting out of college debt

Free financial literacy program offered at Clark

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Editor's note

This story was written by the editor-in-chief of The Independent, Clark College's campus newspaper, as part of a collaboration with The Columbian called Voices From Clark College. It is also being published today in The Independent.

Long before the U.S. dollar dominated the global economy, a simpler commodity was exchanged as money — salt.

Now, in order to help college students become more financially savvy, many students at colleges nationwide — including some at Clark College — are learning about money with Salt, a financial literacy program created by American Student Assistance. The nonprofit is dedicated to helping students and alumni manage their college debt.

Salt is a membership program that offers online workshops and modules to help students learn how to manage their money better. It provides courses on subjects such as budgeting, student loans and loan repayment. The service also tracks students' financial-aid disbursements.

Salt became available for free to Clark College students and alumni last Friday, and now Clark officials plan to incorporate Salt into many areas of the college. For example, financial aid officers will encourage loan recipients to complete courses on student loans and loan repayment in addition to mandatory entrance counseling. Clark's Career Services department plans to supplement its student success workshops with money-management modules. Instructors of First-Year Experience classes will embed personal finance workshops into the classes.

"We hope to see students making informed decisions about money matters," said Edie Blakely, Clark College's director of Career Services. "We hope to see students able to pay back any loans."

Salt stands out among similar financial-literacy programs because of its borrower outreach aspect, according to Karen Driscoll, Clark College's director of Financial Aid.

Salt's borrower outreach involves tapping repayment counselors to help student borrowers develop repayment plans after they graduate, according to American Student Assistance. Using analytics to determine a borrower's risk, the repayment counselors will specifically target those at highest risk of default, according to the organization's website.

Clark College's partnership with Salt starts two years before the federal government's new, more difficult calculation of default rates on student loans take full effect. The new standard has its origins in a U.S. Department of Education decision in 2009 to measure whether a student is in default after three years, instead of the present two-year measure. The three-year measurement will be used beginning in 2014.

The new rule is expected to increase the official default rate for Clark and other colleges, since it adds one more year to the time a student can fall behind in loan payments.

At Clark, for example, the two-year default rate in 2009 was 9.5 percent. Clark College's three-year default rate that same year was 16.3 percent. The national three-year default rate in 2009 for public two-year schools was 18 percent, according to the College Board, a nonprofit organization that researches higher education and college readiness.

High default rates for students in 2014 will result in sanctions for Clark College that will directly affect students. Under the federal rule, schools where default rates exceeded 15 percent in the three most recent years must delay disbursement of loans for 30 days to first-year, first-time student borrowers, according to the Higher Education Opportunity Act.

However, students who qualify for grants will still be able to receive their grant money at the beginning of the term, Driscoll said.

Trying to head off an unacceptably high default rate is a big reason why Clark College signed a two-year contract with Salt, which costs $10,000 per year, using grant money from student technology fees. College officials hope Salt will educate students about loans, resulting in lower default rates.

"It's very good value for the price we're paying," Driscoll said.